Module Three
Understanding Buyers
Understanding Buyers
An Expert’s Viewpoint:
Nick LaRoche is an account executive for S.K.K.R., a
manufacturers’ representative group selling WeberStephens Products. Nick makes an effort to understand his
buyers and the way they do business. For example, Nick
found a way to help one of his customers increase profits
simply by changing the way they purchased Weber
products.
Action
Understanding Buyers
An Expert’s Viewpoint:
Result
The amount Nick sold to this account soon doubled.
The relationship between Nick and the buyer has
continued to grow since the purchasing change. The
buyer has realized increased sales revenue and profits
while Nick has enjoyed watching this account grow in
total volume.
Categories of Buyers
Consumer Markets
Business Markets
Firms
Institutions
Governments
Non-Profit Organizations
Distinguishing Characteristics of
Business Markets
•
•
•
•
•
•
Concentrated Demand
Derived Demand
Higher Levels of Demand Fluctuation
Purchasing Professionals
Multiple Buying Influences
Close Buyer-Seller Relationships
Buying Decision Process
Recognition of
the Need
Search and Qualification
of Potential Sources
Selection of an
Order Routine
Determination of
Desired Characteristics
Acquisition & Analysis
of Proposals
Performance Feedback
and Evaluation
Description of
Desired Characteristics
Evaluation of Proposals
Selection of Suppliers
Needs Gap – An Example from the
Life of a College Senior
I have a job.
Desired State
Needs
Gap
Actual State
I do not have
a job.
Multi-Attribute Model
The base score
The weight
Assessment of
Product or Supplier
Performance (P)
Assessing the Relative
Importance of Each
Characteristic (I)
Multi-Attribute Model: an Example
Networking
Opportunities
On-line Resume Exposure
Service
of Resume
Quality
Control
Networking
Opportunities
Campus Career Exposure
Services
of Resume
Quality
Control
P
I
PxI
4
.5
2
8
.3 2.4
4
.1
P
I
PxI
8
.5
4
4.8
.4
4
.3 1.2
6
.1
.6
5.8
Employing Buyer Evaluation Procedures
to Enhance Selling Strategies
• Modify the Product Offering Being Proposed
• Alter the Buyer’s Beliefs about the Proposed
Offering
• Alter the Buyer’s Beliefs about the Competitor’s
Offering
• Alter the Importance Weights
• Call Attention to Neglected Attributes
Complex Mix of Business Buyer Needs
Functional
Attributes
“Must-Haves”
Psychological
Attributes
“Delighters”
37%
Level of Influence
On Buyers’ Satisfaction
Buyers’
Level of
Satisfaction
63%
Level of Influence
On Buyers’ Satisfaction
Characteristics of the
Three Types of Buying Decisions
Straight Modified
Rebuy Rebuy
Newness of Problem or Need
Information Requirements
Information Search
Consideration of New Alternatives
Multiple Buying Influence
Financial Risks
Low
Minimal
Minimal
None
Very Small
Low
Medium
Moderate
Limited
Limited
Moderate
Moderate
New
Task
High
Maximum
Extensive
Extensive
Large
High
Communication Styles Matrix
High
Responsiveness
Amiable
Expressive
Relationship Oriented
Low
Assertiveness
Slow Paced
Fast Paced
Task Oriented
Analytical
Driver
Low
Responsiveness
High
Assertiveness
Types of Purchasing Decisions
• Straight Rebuy Buying Situation
– Routinized Response Behavior
• Modified Rebuy Buying Situation
– Limited Problem Solving
• New Task Buying Situation
– Extensive Problem Solving
Buying Center Members
• Initiators
• Users
• Gatekeepers
• Influencers
• Deciders
• Purchasers
The roles in the
buying center
work together to
affects the
outcome of the
purchase decision.
Current Developments in Purchasing
Increasing Use of Information Technology
Relationship Emphasis on
Cooperation and Collaboration
Supply Chain Management
Target Pricing
Increased Importance of Knowledge and Creativity